December 15 2014
Allegiancy releases “Cinderella story” of North Carolina office building
Commercial real estate asset manager reveals details of turnaround property
RICHMOND, Va. – Signature Place, a large office building in Greensboro, N.C., was in deep trouble. Its owners had been defrauded by a bankrupt manager. Uncertainty was rampant, and maintenance and leasing had declined so that the property was in danger of entering a death spiral.
Two major tenants, both Fortune 500 companies, had made improvements to their respective suites during lease renewal with the promise of being reimbursed. That reimbursement hadn’t happened. The tenants were now owed $1.5 million, and one was withholding rent in retaliation. The property was in danger of defaulting on its mortgage.
Major vendors hadn’t been paid. Cash reserves were non-existent. The owners were afraid they could lose everything. One owner, Jim Cassidy, said: “We had a bankrupt asset. We were afraid we were going to lose it. We were in great fear.”
Enter the prince(s)
Based on recommendations from trusted advisors, the owners voted to bring in Allegiancy, an experienced real estate asset manager, to take back their property. Allegiancy took the assignment without pay with the understanding that they would receive their standard fees once the property was back on its feet.
Within 48 hours, Allegiancy principals were walking the N.C. property, talking with leasing agents and property managers, and visiting with tenants. Allegiancy CEO Steve Sadler said: “We knew we had to convince everyone involved that there was a new sheriff in town—one who would fix things. We had to establish trust amid the chaos by demonstrating credibility and integrity.”
The Allegiancy team immediately put together a plan and openly shared it with the owners and other key players in face-to-face meetings and phone calls. “People reacted cautiously but optimistically,” recalls Allegiancy president Chris Sadler. Chris added, “We take our properties personally, and we knew these owners were scared. We had to move fast to stabilize the situation without spending much.”
Key to Allegiancy’s property triage, as well as its ongoing work, is addressing the concerns of all the stakeholders— the lenders, tenants, vendors, property and leasing managers. “But at the end of the day,” Chris said, “we are foremost advocates for the owners.”
Steve Sadler said: “It’s pretty simple. We do what the owners would do if they were here. At Signature Place, this meant finding creative solutions that conserved capital by leveraging our experience from managing similar properties around the country.”
As is always the case, Allegiancy found that “the devil was in the details.” But there were also a few hidden “angels” as well.
For example, Signature’s “signature” monument sign told a story of wear and neglect. But the cost to replace it was at least $10,000, more than the owners could justify. From their personal inspection, the Allegiancy team determined that the sign’s oxidation could simply be buffed out. So instead of replacing the sign, they simply used existing staff to do that. Suddenly, the sign looked like new without any new spending.
A happy ending
Today, Signature Place is performing well. It is building substantial cash reserves. It looks welcoming. Its key stakeholders speak positively about the property, expressing trust in the leadership. Tenants are regularly renewing and expanding leases. New leasing is strong, with occupancy at 95 percent. The property value has increased by more than $10 million, with 100 percent of that accruing to the owners.
Property owner Jim Cassidy said, “Allegiancy came in and did what we all hoped it would do on our behalf—to our great satisfaction. They restored trust and value for us.”
Good news for other property owners
The good news for other property owners is that Allegiancy has generated positive returns across virtually all its properties, consistently outperforming its peer group every year. Steve Sadler explained: “Our niche is to protect the investor. We are about maximizing their return on investment with integrity. Someone has to watch out for them.”
More information about how Allegiancy was able to turn the North Carolina property around is available here.
Allegiancy is changing the business of asset management for commercial real estate owners and investors. With an advanced technology platform and singular focus on serving as the owners’ advocate, the company brings fresh vigor to an often poorly understood business. Combining its proactive Value Assurance? operational rigor with an intense focus on cash flow and profitability, Allegiancy is expanding on a track record of more than four decades of success.
Headquartered in Richmond, Va., and led by a team of seasoned professionals and more than 100 years of experience, Allegiancy manages properties that have outperformed their peers by 45 percent since 2006. The company has more than $300 million in assets under management (AUM) and delivers clients attractive returns and profitable, hassle-free investments in commercial real estate.
More information about Allegiancy may be found at www.allegiancy.us.
To schedule an interview with Allegiancy’s leadership, contact Audrey Bevel at email@example.com or 866.842.7545 ext. 204 or (804)201-7161.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Allegiancy, LLC’s (the “Company”) present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the offering circular dated January 14, 2014 and filed by the Company with the U.S. Securities and Exchange Commission on January 15, 2014. The offering circular, and any supplements or updates thereto, is available on the EDGAR system located on www.sec.gov.
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